In Probe, UC Learns Contractor Was Convicted of Fraud / Improprieties seen in hiring procedures

Henry K. Lee, Chronicle East Bay Bureau

Published 4:00 am, Tuesday, December 12, 1995

The contractor hired by University of California employees now under investigation for possible conflict of interest was convicted 13 years ago on federal fraud charges, records show.

John Bothnel, 54, served two years in federal prisons after being convicted of conspiracy to defraud the government. He was released in January 1984.

Authorities now are investigating the business dealings of Bothnel and three employees in the UC president's office with whom he had close personal relationships. According to UC officials, Bothnel was hired by one of the workers -- a friend of his -- and was living with another.

Bothnel's fraud conviction is of interest to investigators because, according to UC officials, he billed the university $31,410 for computer databases and services that were either faulty or incomplete. The databases include information on various UC retirement programs.

The Chronicle has learned that Bothnel was hired by his friend, Jay Huish, director of systems development and coordination. At the time of his hiring, Bothnel shared a residence with Marciene Boone, coordinator of benefit programs.

Elementary school in Oakland opens time capsule from 1927San Francisco Chronicle

Brides of March walk through San FranciscoSan Francisco Chronicle

WildCare rescues Western scrub jay from rodent glue trapWildCare

The Regulars: The CarpenterJessica Christian

Massive fire in San Francisco's North BeachDavid Essling

Huish, 44, Boone and a senior administrative analyst have been on paid administrative leave from the employee benefits department since late September. They worked in the university's downtown Oakland headquarters under Wayne Kennedy, UC senior vice president for business and finance.

Boone, 51, has worked with UC for 25 years and Huish for five, university officials said. None of the employees could be reached for comment yesterday. Kennedy, the administrator who oversees the benefits department, declined to discuss the investigation.

"The university in recent months has undergone a process of revamping and taking a really hard look at the audit process," UC spokesman Terry Lightfoot said. "It will continue to do so."

According to a 30-page UC audit, a copy of which was obtained by The Chronicle, Huish allowed Boone to supervise Bothnel's work, an arrangement that "constituted disregard for an apparent conflict of interest."

The audit found that Bothnel lied on his resume, falsely stating that he earned a bachelor's degree in social psychology from the University of San Francisco and completed graduate work there as well. Huish "conducted a superficial inquiry" into his friend's qualifications, the audit said.

There was never any written agreement between Bothnel and UC for the work he performed, and Huish compromised UC procedures by "investing control over complete financial transactions in himself," according to the audit.

UC regent Stephen Nakashima, chair of the board's audit committee, said yesterday that financial irregularities are inevitable in a large institution like UC.

"You cannot absolutely prevent any theft or any wrongdoing," said Nakashima, chair of the board's audit committee. "You make it harder for them to do it.

The case is the second this year to highlight alleged wrongdoing in the UC president's office. In September, 47-year-old claims manager Diana Spaniol committed suicide after being accused of embezzling nearly $1 million in an elaborate check-writing scheme.

University counsel Susan Thomas said UC conducts background checks on employees "in sensitive situations." But there apparently is no formal system that ensures the legitimacy of outside contractors.

She said further disciplinary action against the three UC employees is pending, and that UC officials are discussing whether any measures will be taken against Bothnel.